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Oct 21, 2018

Sipchem tops bumper earnings from Saudi petrochemical majors

LONDON: Saudi petrochemical producer Sipchem said its third-quarter
profits surged by about half to SR180.3 million ($47.9 million) amid a
brace of strong earnings from the sector.
The company also known as Saudi International Petrochemical Co, plans to
merge with Sahara Petrochemicals as a wave of consolidation sweeps
through the industry.CEO Ahmad Alohali told Al Arabiya that the company’s third quarter performance was encouraging.
“Product prices varied,” he said. “Prices of nine of our products rose
between 14 percent and 30 percent, as every product has its own
dynamics. Production efficiency of Sipchem’s plant also improved.”
He also told the broadcaster that the ongoing US-China trade war could
affect Sipchem, making it shift shipments from one market to another, he
said.
Elsewhere, Yanbu National Petrochemical, also known as Yansab, overcame
an increase in some of its feedstock costs to record a 13 percent jump
in third quarter net profit to SR729 million compared to a year earlier.
It said the increase in profitability was down to higher average selling prices for most of its products.
Meanwhile, Saudi Kayan Petrochemical said net profit for the period rose
by about 24 percent to SR471.9 million compared with a year earlier.

FASTFACTS
12%

The Middle East accounts for about 12 percent of the global production of high-value chemicals.

An improvement in productivity at some of its plants helped to drive profits higher, it said in a filing.
Saudi petrochemical producers from SABIC to Sahara are seeking to boost
output and efficiency while oil companies such as Saudi Aramco are also
increasingly looking at crude to chemicals technology to tap into the
changing industry demand drivers.
Petrochemicals are set to account for more than a third of the growth in
world oil demand to 2030, and nearly half the growth to 2050, adding
nearly 7 million barrels of oil a day by then, according to the
International Energy Agency (IEA).
“Our economies are heavily dependent on petrochemicals, but the sector
receives far less attention than it deserves,” said Fatih Birol, the
IEA’s executive director.
“Petrochemicals are one of the key blind spots in the global energy
debate, especially given the influence they will exert on future energy
trends. In fact, our analysis shows they will have a greater influence
on the future of oil demand than cars, trucks and aviation,” said Birol
in a report earlier this month.
The Middle East remains the lowest‑cost center for many key petrochemicals.
Saudi Arabia and the wider Middle East are at the lower end of the cost
curve among petrochemical-producing regions for primary chemical
production.
Currently the region accounts for 12 percent of the global production of
high-value chemicals, 9 percent of ammonia production and 15 percent of
the methanol market.
In addition it also has huge growth potential with 90 percent of naphtha
output currently exported instead of being used as petrochemical
feedstock because of the ample availability of
natural gas.https://www.geezgo.com/sps/43760